7 Trends: Generation Z and insurance

Like most industries, insurance must adapt to the changing needs of consumers in order to thrive. As an insurance agent, I've noticed several ways insurance is evolving to be more relevant to the newest generation of customers—Generation Z.

Born between 1997 and 2012, some of these “kids” are now growing up, getting jobs, and starting to make their own financial decisions.

What makes this generation unique is that they're the first generation to fully grow up in a digital world. They have been surrounded by smartphones, tablets, wearable devices, and everything else digital their whole lives.

So, what does this mean for insurance?

As you would expect, most Gen Z-ers' instinct is to go online to buy insurance, without talking with anyone IRL (or “in real life” for those non-Gen Z-ers), about their insurance needs, priorities, goals, or financial situation. This often leads to them not totally understanding what they're buying.

Unfortunately, I can offer story after story of people who found themselves in a tough spot because they did not have enough insurance coverage when things went wrong. Simply choosing an insurance policy because it's fast and easy usually means it's also the one with the bare minimum coverage.

I recently had a potential new client call me after their insurance company denied a claim. They went on vacation and came back to a house filled with water, costing them over $75,000 in damage. Their insurance company didn't pay the claim because the homeowner never added water backup coverage to their policy—and worse, their agent never even talked to them about this optional coverage.

My team has taken it upon themselves to help this next generation of adults (who now make up about 21% of the US population!) make better decisions when it comes to insurance.

Over the past few years, we've discovered a few things about how to connect with, and advise members of Generation Z about insurance. Here's what we've learned.

1. They prioritize all things “digital.” This generation is looking for:
   • State-of-the-art apps to let them manage their policies online anytime, anywhere.
   • Easy payment options like Venmo, PayPal, and Apple Pay.
   • Alternatives to in-person meetings using virtual tools like Zoom and Facetime.
   • The ability to sign all paperwork digitally through services like DocuSign.

2. They value inclusiveness and being socially conscious. Gen Z tends to be characterized as caring deeply about social causes and is also the most diverse generation in U.S. history.

   Brands that demonstrate trustworthiness, relatability, and inclusivity may resonate more with them than brands that don't. Insurance agents who are already doing great work in their communities, should highlight this on their websites and social media.

   If your team speaks multiple languages, let it be known! We have agents who speak English, Spanish, Polish, and Arabic which helps create an inclusive and relatable environment for all our clients.

3. Flexibility is important: Gen Z wants what they want, when they want it. They're used to being able to use an app to order an Uber, or get pizza delivered at any time of day.

   For insurance, it's best to direct this generation to carriers who offer 24-hour service through their website or mobile app. If you're an insurance agent, being available to your Gen Z customers directly via your cell phone and especially through text will pay dividends.

4. Transparency is important, too: Gen Z prefers an insurance shopping experience that's straightforward without hard-to-understand insurance jargon. It's always recommended to be upfront about all the options you have to offer, complete with pricing and crystal-clear information about their policy options. Simplify whenever possible.

   For example, we find it helpful to explain what exactly an independent insurance agent is, how we're experts at understanding the pros and cons of each insurance carrier, and how this helps us find the best value for our clients.

5. They want coverage for the gig and sharing economies: Did you know that 30% of 18-29-year-olds have used a “gig platform” to make money? This includes services and apps like Uber, Lyft, Doordash, and Airbnb.

   Always, always, always ask Gen Z clients if they use any of these types of services. Many insurance carriers have existing relationships with companies in the gig and sharing economies, or endorsements that can be added, that may not be apparent online to consumers.

6. They want less traditional insurance products: Guess what? The tech-savvy generation that grew up with technology may want to protect it. They've often poured money into expensive smartphones, gaming equipment, and other electronic devices that they may be interested in insuring—it's always worth an ask.

   We're also seeing more 20-somethings ditching traditional cars in favor of e-bikes and bicycles. Surprisingly, many of them may not even know that insurance is available for these types of transportation.

   Another shift is attitudes towards pets. Gen Z-ers are more likely than previous generations to consider their pets as their “children” and also spend more money on extras like specialty food, training, and doggy daycare. Pet insurance helps give them peace of mind, so they don't have to choose between rent and an unexpected vet bill.

7. They also want savings, and then more savings: Gen Z-ers may be more cautious of spending than past generations. Many in Gen Z experienced their childhoods amid the 2008 recession and now, over half of Gen Z-ers say that are living paycheck to paycheck.

   Good student discounts, paperless savings, bundling policies, and programs like telematics that lower car insurance rates for safe driving are all ways insurance companies and agents can help Gen Z can save money on insurance.

If you're an insurance agent or provider, we hope you embrace the seven trends described above to help support the needs of the next generation and the growth of the overall industry.

If you're part of Gen Z (or maybe have a child who is) please take a minute to have a conversation with an insurance agent who can help maximize your coverage within your budget. It can't hurt and usually doesn't cost a thing to quote with an agent.

How do I talk to an insurance agent?

Reach out to me or anyone my team! If we're not licensed in your state, I'm happy to recommend a trusted insurance agent who is. Or search online to find an agent near you.

Why use an insurance agent?

Why use an insurance agent when you can buy insurance online directly from an insurance website?